Business insurance rates could soar as Trump admin. pushes up rates
The U.S. Federal Reserve’s interest rate hike could bring the country’s rates up as much as 6% by the end of the year, according to a new study from the American Association of Business Insurance Executives.
The ABAE’s “Incentives for Businesses” report predicts a 1.6% jump in rates by the first quarter, and a 5.1% increase in 2018, according the Associated Press.
The report predicts an even more dramatic hike by 2020, with rates increasing by nearly 8%.
Business insurance rates have skyrocketed under President Donald Trump, who pushed for a 10% boost in the rate for the first time in history.
The Trump administration is currently in the midst of a $1.4 trillion spending plan to help shore up the economy.
While the Trump administration has been busy making good on the promises of his economic policy, its been pushing for more rate hikes, according BizPac Review’s Scott Johnson.
The administration has pushed for the rate to be lowered to 2%, a move that will be especially difficult given the rate hike announced in February and the fact that the economy has been struggling since Trump’s inauguration.
Trump’s administration has also been pushing to raise corporate rates to 3%, which would mean that the rate of return for most corporations would drop by almost 40%, according to Johnson.
In addition, companies would have to pay a 25% tax on profits.
The report is not without criticism, however.
BizPAC Review President Kevin Burt noted that the report is based on the assumption that businesses are going to hire more people and hire them at lower rates.
This would not necessarily happen, as companies have already been raising their labor costs and are likely to do so again.
Burt also noted that companies are already making significant cuts in costs, and the report assumes that they will continue to do that under Trump.
“There are real risks in the current policy environment, and there’s a lot of room for policy uncertainty,” Burt said.
BizPac reviewed the costs of business insurance under current policies.
It found that under current business policies, insurance premiums were about 13% lower than under President Trump’s proposal.
However, the authors said the risk of premiums rising further under Trump’s plan is “very low.”
The report also found that many companies already have the ability to raise rates if they decide to.
For example, the study found that nearly 60% of the companies surveyed would not increase their rates under Trump, which would make it the third-lowest rate increase in the report.
Other business insurance providers that have been in a downturn since the beginning of the financial crisis include Allstate, UnitedHealth, United Parcel Service, and Humana.